Despite a souring political climate and escalating trade tensions, Canadian investors are quietly betting big on Wall Street.
US President Donald Trump’s tariffs, annexation threats, and frequent barbs have sparked outrage north of the border, prompting Canadians to sell off US real estate, boycott American goods, and pull back on cross-border tourism.
Yet, when it comes to stocks, the flow of money tells a different story.
The numbers
So far in 2025, Canadians have funnelled C$124 billion ($89.7 billion) into US equities, according to data from Warren Lovely at National Bank of Canada Financial Markets.
At this pace, inflows are on track to be the strongest since at least the 1990s. The contradiction is striking.
This year, Canadian stocks have actually held the upper hand: the S&P/TSX Composite Index has climbed nearly 14%, outpacing the 9.5% gain in the S&P 500 Index.
Still, investors appear unmoved by patriotic appeals to “Buy Canadian.”
To buy or not to buy?
Locals have “seemingly failed to employ a ‘buy Canadian’ (or ‘sell American’) philosophy in their own portfolio dealings,” Lovely, a managing director at the firm, wrote in a client note.
He described the buying spree as “rather stunning,” especially given that American liquor has disappeared from Canadian shelves and public opinion polls suggest citizens want pension managers to dial back their US holdings.
In fact, a July survey showed that Canadians largely support reducing exposure to US assets.
Sun Life Financial Inc., one of the country’s biggest workplace pension providers, said some clients did make that shift earlier this year as Trump’s tariff war intensified.
Even so, momentum continues to carry investors southward. The appeal seems tied less to politics and more to the powerful rally in US markets, particularly around artificial intelligence.
Performance-chasing & AI
The tech-driven surge has repeatedly propelled Wall Street heavyweights to record highs, fueling what some see as pure performance chasing.
“It’s a lot of performance chasing,” said Greg Taylor, chief investment officer at Vancouver-based PenderFund Capital Management Ltd.
“Years of U.S. market outperformance, driven by the rise of AI and inflows into mega-cap tech stocks, have made it difficult for investors to sit on the sidelines.”
Trends come & go
Taylor isn’t convinced the trend will last. Managing about C$4.5 billion, he says Canadian and European equities look more attractive now after the US’s multi-year run.
“The US market is looking really crowded and stretched right now,” he said. “The S&P/TSX Composite Index is looking like a nice setup for the next 12 months.”
Prime Minister Mark Carney struck a conciliatory note last week, announcing Canada would lift its retaliatory tariffs on US goods as a gesture of goodwill.
That news helped push the Canadian benchmark to its 30th record high of the year, adding yet another twist to a year defined by sharp contrasts: Strained politics, strong markets, and investors who seem unable to resist the pull of Wall Street.
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